Do you think rebound in the stock market in the fourth quarter?
I think so. At least there will be temporary rebound in the stock market towards end of this year due to following reasons:
Higher US Dollar
Lower individual tax rates after presidential elections
Efforts for fixing ailing banks
Commodity prices have crashed and it will lower the raw material cost.
Prices of oil and gasoline are coming down
Oil will come down even below $70 a barrel at the end of this year and after presidential election.
Stocks to watch
Vanguard Small Cap VIPERs(VP)
Some food giants such as Sanderson Farms
Some alterative energy stocks (selected)
I think above sectors will outperform market in the fourth quarter and beyond.
Do you any other thoughts.
Thanks.
Answers
951 points
Grudun answered 3 months ago …
I think any action in the 4th quarter is going to depend heavily on the election.
If Obama is elected with a strongly democratic legislature then I expect it to be a drain on the markets in the 4th quarter as investors prepare for tax increases as the Bush cuts expire and Obams "reforms" the tax code(read more loopholes and higher official rates for the "rich").
If McCain is elected then it will likely mean gridlock at the federal level which would be extremely advantageous for stocks.
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